CBOT wheat futures fall on profit-taking
Wheat futures on the Chicago Board of Trade closed lower Thursday on technical selling and profit-taking along with a firming dollar that makes US wheat less competitive globally, traders said. Market pared losses near the closing bell.
Copyright Reuters, 2014
The dollar powered higher against other major currencies one day after Federal Reserve Chair Janet Yellen surprised world markets by signalling that increases in US interest rates were not as far away as most had thought. Market seen as technically overbought after front-month CBOT wheat rose to $7.23-1/2 a bushel, the highest spot price on a continuous chart since April 2013.
Additional pressure stemmed from rumours that buyers in Brazil and Nigeria were trying to switch the origin of purchased cargoes of US hard red winter wheat to the Black Sea region. Updated weather forecasts for the drought-hit southern US Plains looked wetter in April but rains for the next 10 days should be minimal, stressing crops as they end their winter dormancy.
USDA reported export sales of US wheat in the latest week at 401,900 tonnes for 2013/14 and 195,200 tonnes for 2014/15, within a range of trade estimates. Analyst Strategie Grains raised its forecast for this year's EU soft wheat harvest to 137.7 million tonnes, up from 137.5 million tonnes seen last month and 2 percent above the 2013 crop, as it increased estimates of the area sown with wheat in some EU countries.